Losses and Gains in Foreign Exchange: An update on global currency - February 2021

    Feb 26, 2021 @ 11:55 AM / by Zenab Tavakoli

    fx rates

    Turbulence Continues in the Global Economy 

    Global economic turbulence continues in the early months of 2021. Below are AIRINC’s summaries of the month’s rate changes over 3.5% taken from our review last week. For up-to-date figures, please reach out to your client engagement representative or click here to reach our inquiries team now.

    One change of note came over the weekend. On February 21st, Sudan’s central bank announced it will steeply devalue the Sudanese pound in an attempt to access debt relief. Prior to the change, the official rate was artificially maintained at 55 SDG to the dollar. The central bank is now attempting to unify the official rate with the black market rate. As such, the official rate is currently hovering around 375 SDG to the dollar. These changes will be reflected in next month’s rates.

     

    Currencies Losing Value against the USD:


    ARS – Argentine Peso

    Argentina is in a state of near-constant financial crisis, with recurrent economic collapses and defaults on sovereign loans, accompanied by hyperinflation and regular devaluation of the currency.

    JMD – Jamaican Dollar

    The Jamaican economy has been hit hard by the COVID-19 crisis. Jamaica’s tourism and mining sectors are the two largest earners of foreign currency on the island and they have been operating below capacity since the onset of the pandemic. Jamaica has experienced longer periods of imbalanced supply and demand for hard currencies, resulting in depreciation against the USD.

    MMK – Burmese Kyat (Myanmar)

    On February 1st, the Myanmar military declared a state of emergency and seized control of the government, claiming irregularities and voter fraud in the 2020 election. Coups are frequently accompanied by economic instability due to the risk of international sanctions, a decline in sovereign debt rating and reduced ability to issue public debt, and the alienation of foreign investors. Predictably, there was a sharp depreciation of the Burmese kyat in the days after the coup. While the rate has since stabilized, further fluctuations may occur as the political situation unfolds.

    VES – Venezuelan Bolivar Soberano

    The Venezuelan bolivar continues its years-long trend of depreciation. Increased dollarization, excess liquidity, and general financial mismanagement contributed to the constant drop in the currency’s value. Currencies Gaining Value against the USD.

     

    Currencies Gaining Value against the USD:


    TRY – Turkish Lira

    The Central Bank of the Republic of Turkey instituted strict monetary policies under the leadership of its new governor, Naci Agbal, who came to the position in November 2020. Efforts to stem inflation and defend the value of the lira have been remarkably successful, making the lira the best-performing currency in emerging markets. There has been an increase in investor interest in the TRY.


    How can you stay up-to-date on currency changes? 

    For up-to-date figures, please reach out to your client engagement representative or click here to reach our inquiries team now 

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    Topics: Currency Volatility, Hardship, foreign currencies, Global Mobility, Hardship Evaluations, Currency Devaluations, Insights and Experience, Coronavirus, COVID-19

    Zenab Tavakoli

    Written by Zenab Tavakoli

    Zenab joined AIRINC in 2013 as a surveyor, and later research coordinator. As part of the research team, she traveled to over 70 countries. In 2021, she transitioned into the role of data analyst. She received her B.A. in Anthropology and French from Harvard College. Zenab speaks English, French, and Spanish, as well as some German, Norwegian, and Italian. She is based in Cambridge, MA.